Views of Mr.V.Swaminathan on RERA

RERA – Central Code/Rules v State Rules -Irresolute Conflict !

An UPDATE (Apropos of Previous BLOGS, Posts on Linkedin, to reiterate)

Varying Defn. of “Ongoing Projects” for registration – All In A Mess ?!

In other words, briefly stated, the following two points of the dispute could arise, even at the inception. That is, Whether, for meeting the requirement of registration, the project has to be taken as an ‘ongoing project’ or not.
Better stated :
1.Whether promoter has to act in accordance with what the Central RERA provides; or what the state enactment says, in case the respective conditions are at variance or materially incompatible /divergent?
2, Should the promoter (or authorized external certifier) be faced with genuine ambiguities or inadequacies in the Rules, posing difficulty in understanding and complying with the state enactment, that too on all fours, what is the possible expeditious recourse open, for an acceptable and satisfactory resolution of the stalemate!

Similar problems could arise even after the registration, in respect of compliance with some of the other procedural requirements gravely wanting clarity; for example, issuance of phase-wise OC / CC as envisaged,
The concept of OC/CC by itself, mandated as a sine quo non, – besides under the GST Code for levy of ‘service tax’ on ‘deemed works contract’- is, even otherwise, if critically viewed, a shallow or hollow formality, a deceptive  paper tiger -from a strict practical /utility viewpoint-, suffering from inherent infirmities. In other words, going by wisdom gathered in hind sight /past experience, the mandated requirement has proved to be nothing but a socioeconomic /-psychological ploy of its kind, foisted upon, simply for the heck of it /bureaucratic fancy or fantasy, ultimately serving no real purpose of the buyers-consumers’ benefit.

KEY Note: Apart from the imponderables under discussion, -with reference to the unanswered (or  -able) questions  on the Rules governing ‘ongoing project’- if not mistaken, likewise, Not- so Frequently- Asked – Questions, but  begging for answers / resolution, concern the significantly varying formats for ‘Agreement to Sell’ prescribed by States, in comparison to the Model prescribed by the Centre. 

TAIL Piece:
Ref. “Mohan and the advocates on the panel highlighted the following aspects:….”

EXtracts (selectively, with own comments supplied- inset):

  1. “A promoter cannot accept more than 10% of the sale value from a buyer unless a sale agreement is registered, but a sale agreement is not really required under the RERA Act.Other points of conflict between RERA and existing Acts may come up, which can only be resolved in time.A proposal to revise the Karnataka Apartment Ownership Act in light of RERA is also being considered.” (FONT supplied)
  • ¨     RERA is a Regulatory Act, not a complete code by itself. Guess that the reference is to ‘agreement to sell’, not ‘conveyance deed’. If not mistaken, the Central so also the States’ RERA Rules do prescribe the standard format for ‘Agreement to Sell’ – though not for sale (conveyance) deed, requiring to be executed.
  •    If heard right (open to correction), the authority in his televised interview, made a mention of repealing MOFA under contemplation (not of revising MAOA); and, have in place, a new legislation, to take care of the aspect of ‘title’ to the buyer.

Even otherwise, in such matters of vital – not just procedural but of substantive- nature, the provisions of the special state (S) enactment (s) governing flats/apartments should apply and, with no option open,  be complied with.

To reiterate own viewpoints stressed often before, and re-share, what MAHA had done in repealing the MOFA is a misconceived step. For, in respect of all those areas not specifically covered in RERA, the provisions of both MOFA and MAOA might have to be necessarily be referred, relied upon, and applied.

  1. “The confusion between Completion Certificate and Occupancy Certificate was clarified. When a construction is completed, a Completion Certificate will be issued. An Occupancy Certificate will be issued after utilities (water, power, sewage lines) are provided. The Act applies to ongoing projects only; projects that have obtained Completion Certificates before RERA was implemented, are exempt.”
  • ¨    No clue as to who or when has clarified so, and in what context! Anyway, the purport or import thereof is far from being understood readily. So far as one is aware, the two terms have been in use, in certain limited quarters, but interchangeably, perhaps unwittingly.
  •    Be that as it may, formal ‘conveyance’ and registration of  (Sale) of flat or apartment to buyer(s) , so also the final conveyance to CHS or ‘Owners’ Association’ of the entire property, including land and building(s), as envisaged and required by the above referred state enactments, for obvious reasons, could not conceivably be at any point in time earlier than the development has been completed , in all respects, so as to be given possession, and actual occupation .
  1. “RERA will not apply to projects that are already 60% registered and construction is complete. Some argued that this 60% rule is diluting the Act. There is no relief for the remaining 40% of buyers whose flats have not been registered and the builder is creating trouble.”
  • The referred 60% rule, it appears, – or corresponding rule of any other State, – is highly debatable, on more than one ground; not only on the ground of it having diluted the provision in the Central rule. To hint at Arbitrariness in doing so, with no rhyme or reason, and being contrary to the Central rule, Problems (inherent) in implementation, so on.

(OPEN /Invite Experts in field practice, with a direct exposure and experience, to eminently Edit, for enlightenment, in a better light, for the common good. For doing so, suggest to look up /cross refer the analytical study of MOFA and MAOA earnestly attempted and the personal viewpoints faithfully shared and available in public domain – See the Previous Blogs, websites, etc.; And a published Article here-   LAW vs CASE LAW ON FLATS  2014 (3) Kar. L.J. pg. 1 to 25 > 48  )

MORE Articles (Related – displayed on  Lci and elsewhere) >

ADD-on : Here is a video interview , just one in a series of those, @;which makes for an interesting  exposition by a topmost state RERA authority, in Maharashtra, of what is the expectation by the government under the law,  of the ‘promoters’ of ongoing projects,  with regard to compliance with the mandates of registration, etc. As seems to have been admitted, there are ‘grey areas’, not unlikely to pose challenges, if and when met with. If so, the positive indication seems to be clearly that the implementation and strict enforcement of the RERA – central or of the state, in its present form/structure- , more so in favor of the consumer- buyer , especially in all cases, within the rigid time frame for completion /possession as envisaged by the RERA , by itself, might pose peculiar problems, not possible to be resolved as expected, expeditiously.. This , so also the many other aspects (such as,  OC x CC* , MOFA, etc.,)  briefly touched upon, in one’s firm conviction, call for further insightful deliberation, and prudent /incisive consideration, by one and all ,-not barring the law experts/pundits, at large,-  having common but serious concerns, about the eventual success at least in the most  crucial of the aspects, galore. 

On the explanation as to why “OC’ , not “CC” was prescribed as the sine qua non for registration, its validity calls for in-depth deliberation /review. For this purpose, – apart from the viewpoints shared and canvased  in the above referred published material, – the special definitions in the RERA,  of  the terms of relevance,  – “Completion Certificate” and “Occupancy Certificate”, so also of  “Development works”, “External / “Internal -development works”, ought to be taken a conscious note of.  Prima facie, the said definitions suffer from certain deficiencies, on account of overlapping in certain respects. Nonetheless, in one’s conviction, based on a conjoint / harmoniousness reading, and incisive understanding, of the underlying scheme of things, in toto, there appears to be no rhyme or reason, or sound logic, for MAHA or any other state, in excluding, in violation of /deviation from the Centre’s RERA Rules, from the purview of  registration of all such other ongoing projects having no “CC”.